LPL Financial (LPLA) AI Stock Analysis

• Market Cap: $28.80B
• Dividend Yield: 0.32%
• Average Volume (3M): 597.93K
• Price to Earnings (P/E): 33.1
• Beta (1Y): 1.24
• Revenue Growth: 35.19%
• EPS Growth: -18.62%
• Country: US
• Employees: 9,118
• Sector: Financial
• Sector Strength: 70
• Industry: Financial - Capital Markets
• EPS (TTM): 5.20
• Shares Outstanding: 80,037,620
• 10 Day Avg. Volume: 473,596
• 30 Day Avg. Volume: 597,929
• PEG Ratio: 11.03
• Price to Book (P/B): 8.32
• Price to Sales (P/S): 1.97
• P/FCF Ratio: -85.61
• Enterprise Value/Market Cap: 1.11
• Enterprise Value/Revenue: 2.05
• Enterprise Value/Gross Profit: 8.50
• Enterprise Value/Ebitda: 15.59
• 1Y Price Target: $430.92
• Price Target Upside: 18.92% Upside
• Rating Consensus: Strong Buy
• Number of Analyst Covering: 14
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 63 Neutral
• Price Target: $383.00 ▲(5.70% Upside)

The score is anchored by mixed financial quality—strong top-line growth and improved gross margin offset by weaker net margins and negative operating/free cash flow. A constructive earnings call (record assets/EPS and Commonwealth integration progress) supports the outlook, but elevated valuation and only neutral technicals limit the overall rating.

Positive Factors

Diversified, recurring revenue model

LPL earns recurring advisory fees based on AUM plus commissions and technology fees, creating diversified cash flow streams. This mix supports durable revenue stability across cycles, reduces reliance on single-product sales, and underpins long-term advisor platform stickiness.

Scale and asset-gathering momentum

Record $2.3T assets and strong organic net new assets (7% annualized) signal durable scale benefits: larger AUM base drives recurring fee revenue, improves bargaining power with product providers, and enhances network effects that attract and retain advisors over multiple quarters.

Successful acquisition integration and synergies

High retention and an indicated run-rate EBITDA contribution from the Commonwealth deal point to meaningful, lasting operating leverage. Successful integration expands advisor count and AUM while delivering cost synergies that sustainably improve margins once fully realized.

Negative Factors

Negative operating and free cash flow

Persistent negative operating and free cash flow undermines the firm's ability to self-fund growth, pay down debt, or return capital. Over months this can force higher reliance on external funding, increase interest costs, and constrain strategic investments and acquisitions.

Compressing net margins and falling ROE

Material declines in net margin and ROE indicate deteriorating profitability and lower capital efficiency. If persistent, this reduces internal capital generation, limits reinvestment capacity, and weakens returns to shareholders despite top-line growth.

Rising interest expense and revolver reliance

Increasing interest expense from revolver usage raises fixed costs and sensitivity to rate moves, eroding net margins. Over the medium term this can constrain flexibility for M&A or buybacks and may force more conservative capital allocation until cash conversion improves.

LPL Financial Business Overview & Revenue Model

Company Description

LPL Financial Holdings Inc., together with its subsidiaries, provides an integrated platform of brokerage and investment advisory services to independent financial advisors and financial advisors at financial institutions in the United States. Its brokerage offerings include variable and fixed annuities, mutual funds, equities, retirement and education savings plans, fixed income, and insurance, as well as alternative investments, such as non-traded real estate investment trusts and auction rate notes. The company also provides advisory platforms that provide access to mutual funds, exchange-traded funds, stocks, bonds, certain option strategies, unit investment trusts, and institutional money managers and no-load multi-manager variable annuities. In addition, it offers money market programs; and retirement solutions for commission-and fee-based services that allow advisors to provide brokerage services, consultation, and advice to retirement plan sponsors. Further, the company provides other services comprising tools and services that enable advisors to maintain and grow their practices; trust, investment management oversight, and custodial services to trusts for estates and families, as well as insurance brokerage general agency services; and technology products, such as proposal generation, investment analytics, and portfolio modeling. The company was formerly known as LPL Investment Holdings Inc. and changed its name to LPL Financial Holdings Inc. in June 2012. LPL Financial Holdings Inc. was founded in 1989 and is based in San Diego, California.

How the Company Makes Money

LPL Financial generates revenue through multiple key streams, primarily by charging fees for asset management and advisory services, as well as commissions from brokerage transactions. The company earns a significant portion of its revenue from advisory fees based on assets under management (AUM), which are recurring in nature and provide a stable income. Additionally, LPL collects commissions from the sale of various financial products, including mutual funds, ETFs, and insurance products. The firm also benefits from technology and transaction-based fees charged to advisors for using its proprietary platforms and services. LPL has established partnerships with various financial product providers, which enhances its offerings and contributes to its revenue through distribution agreements. Overall, the combination of fees from advisory services, commissions from transactions, and technology service revenue constitutes the primary drivers of LPL Financial's earnings.

LPL Financial Financial Statement Overview

Summary

LPL Financial shows strong revenue growth and improved gross profit margins, indicating effective cost management and business expansion. However, declining net profit margins and negative cash flows pose challenges to profitability and liquidity. The reduction in leverage is a positive sign, but the decrease in return on equity suggests a need for improved profitability.

Income Statement

LPL Financial has demonstrated strong revenue growth with a 10.22% increase in TTM, indicating robust business expansion. However, the net profit margin has decreased to 5.35% in TTM from 8.55% in 2024, suggesting pressure on profitability. The gross profit margin improved significantly to 43.37% in TTM, reflecting better cost management. EBIT and EBITDA margins have remained relatively stable, indicating consistent operational efficiency.

Balance Sheet

The company's debt-to-equity ratio has improved to 1.53 in TTM from 1.96 in 2024, showing a reduction in leverage. However, the return on equity has decreased to 20.61% in TTM from 36.12% in 2024, indicating a decline in profitability relative to shareholder equity. The equity ratio remains stable, suggesting a balanced capital structure.

Cash Flow

LPL Financial's cash flow position is concerning, with negative operating and free cash flows in TTM, indicating potential liquidity challenges. The free cash flow to net income ratio is positive at 1.41, suggesting that despite negative cash flows, the company is generating cash relative to its net income. However, the operating cash flow to net income ratio is negative, highlighting inefficiencies in converting income into cash.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	15.57B	12.39B	10.05B	8.60B	7.72B	5.87B
Gross Profit	3.76B	3.37B	3.05B	2.37B	1.71B	1.49B
EBITDA	2.05B	2.11B	1.99B	1.53B	936.43M	908.93M
Net Income	833.05M	1.06B	1.07B	845.70M	459.87M	472.64M
Balance Sheet
Total Assets	18.03B	13.32B	10.39B	9.48B	7.99B	6.60B
Cash, Cash Equivalents and Short-Term Investments	1.54B	1.01B	541.76M	884.28M	514.92M	818.36M
Total Debt	7.71B	5.75B	3.96B	2.95B	3.05B	2.59B
Total Liabilities	12.99B	10.39B	8.31B	7.31B	6.32B	5.28B
Stockholders Equity	5.04B	2.93B	2.08B	2.17B	1.67B	1.31B
Cash Flow
Free Cash Flow	-1.94B	-284.94M	109.33M	1.64B	237.15M	634.41M
Operating Cash Flow	-1.38B	277.59M	512.61M	1.95B	453.13M	789.94M
Investing Cash Flow	-3.17B	-1.59B	-860.19M	-376.40M	-458.64M	-187.50M
Financing Cash Flow	4.40B	1.42B	-208.53M	-504.27M	278.84M	-275.19M

LPL Financial Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 362.36
• 50DMA: Negative
• 100DMA: Positive
• 200DMA: Positive
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For LPLA, the sentiment is Positive. The current price of 362.36 is below the 20-day moving average (MA) of 366.11, below the 50-day MA of 365.63, and above the 200-day MA of 355.12, indicating a neutral trend. The MACD of -0.08 indicates Positive momentum. The RSI at 50.33 is Neutral, neither overbought nor oversold. The STOCH value of 30.46 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for LPLA.

LPL Financial Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
RJF	76 Outperform	$33.12B	16.29	17.64%	1.26%	6.45%	5.85%
IBKR	75 Outperform	$31.38B	33.95	19.82%	0.46%	11.88%	28.96%
SF	75 Outperform	$13.24B	22.99	11.73%	1.43%	7.54%	2.73%
SCHW	74 Outperform	$178.00B	23.50	17.05%	1.07%	5.90%	66.60%
TW	73 Outperform	$24.56B	35.47	10.51%	0.45%	22.17%	40.13%
Sector *	68 Neutral	$18.00B	11.42	9.92%	3.81%	9.73%	1.22%
LPLA	63 Neutral	$28.80B	33.11	21.32%	0.32%	35.19%	-18.62%

LPL Financial Corporate Events

LPL Financial appoints Somesh Khanna to board

On January 5, 2026, LPL Financial Holdings Inc. elected Somesh Khanna to its board of directors as an independent director, a move announced publicly on January 8, 2026. Khanna, currently a senior advisor at McKinsey & Company and executive co-chair of technology services firm Apexon, brings more than 30 years of consulting and financial services leadership, including senior roles in global banking, digital strategy and organizational transformation, as well as prior CEO experience in a digital trade receivables securitization business. He also serves on the boards of KeyCorp and Persado. LPL’s board chair, Jim Putnam, highlighted Khanna’s deep expertise in digital transformation, artificial intelligence and data-driven strategic planning as directly aligned with LPL’s growth trajectory and ongoing efforts to innovate for financial advisors, institutions and their clients, suggesting his appointment could strengthen the firm’s strategic positioning in technology-enabled wealth management. Khanna’s addition to the board, combined with his advanced management and engineering education, underscores LPL’s focus on leveraging digital and AI capabilities to support advisors and enhance productivity across its large, advisor-centric platform.

The most recent analyst rating on (LPLA) stock is a Buy with a $444.00 price target. To see the full list of analyst forecasts on LPL Financial stock, see the LPLA Stock Forecast page.